The big question mark for Apple is whether Microsoft intends to put its considerable resources behind its own synchronisation software effort. Microsoft is expected to announce, as early as March, during its Mobility Developer Conference, refinements to its synchronisation software, called ActiveSync. But it remains unclear when the company might increase marketing and development efforts behind its synchronisation strategy. A Microsoft representative said the company had no immediate plans to incorporate ActiveSync into its Windows operating system. Such a move would most likely mean that Microsoft would automatically control the vast majority of the sync software market. While Microsoft says it has not decided on its plan, analysts said that adding ActiveSync to Windows is a real possibility, should the market heat up. "Microsoft is considering making ActiveSync a part of the operating system, which would be consistent with the company's past strategy of bundling 'mature' technologies into Windows," Gartenberg said. Directions on Microsoft analyst Robert Helm said he hadn't "heard anything specific" about such a move. Still, bundling ActiveSync into Windows with the next service pack would be a quick way to respond to Apple's plans for iSync. "ActiveSync is definitely Microsoft's strategic synchronization protocol today, but that could change a lot over the next three to four years," Helm said. Clearly, Microsoft is taking this area more seriously. But the company's approach differs in several respects from Apple's. For one thing, the software titan has largely focused on synchronisation of corporate data, which has helped PocketPC steal some momentum from Palm in the personal digital assistant market. However, Microsoft's synchronisation approach uses proprietary protocols, which could slow its acceptance among third-party developers and corporate information services departments, analysts said. Right now, Apple's iSync supports several synchronization protocols, but "SyncXML is the emerging standard," and the one Apple most aggressively supports, said Joe Hyashi, the company's director of applications worldwide product marketing. Microsoft's more proprietary approach could greatly benefit Windows, since consumers would need the latest version of the operating system in order to obtain ActiveSync. That plan would be similar to Microsoft's approach to the media player market, where Windows XP includes a more feature-packed version of its Media Player software. But the company's plan is not set in stone, making it difficult for Apple and other competitors to see where Microsoft is headed. "Looking further out, it's not clear that ActiveSync is the Microsoft synchronization protocol," Directions on Microsoft's Helm said. "The company actually has several synchronization protocols it's supporting today: ActiveSync, SQL Server replication...(and) Outlook." Apple's in more than one basket
Another advantage for Apple could be that Microsoft has largely limited its focus to handhelds and cell phones running the company's PocketPC software. Apple, in contrast, is looking at a broader array of devices. Apple's early synchronisation strategy largely focuses on cell phones, which the company sees quickly displacing personal digital assistants as repositories for contact and calendaring information. "We believe this (cell phone and iSync strategy) replaces the PDA," Apple's Schiller said. "The cell phone becomes your PDA." Apple is hedging its bets on cell phones as the wireless handset industry recovers from its worst year. But analysts see rapid growth on the horizon, particularly as carriers deploy more advanced networks, and manufacturers add more features to devices. IDC expects handset sales to rise from 391 million this year to 606 million by 2006. Another reason to focus on cell phones for synchronisation with PCs is that consumers and businesses typically replace cell phones more quickly than PCs. On top of that, manufacturers are rapidly adding newer, PC-like features to phones. "The next big thing happening on the cell phone is the digital picture stuff," Schiller said. But synchronization is about more than cell phones, particularly as consumers add digital cameras, camcorders and music players to the growing list of devices they connect to computers. Apple clearly is considering these other categories, starting with its iPod digital music player. Already, the company has successfully positioned the Mac as a hub for connecting digital devices. "As personal computers can synchronise more data types beyond calendar and contacts -- as the iPod synchronizes music -- we will see more devices proliferate," Jupiter Research's Gartenberg said. "For example, a future DVR (digital video recorder), might not record anything directly, but sync the TV shows to your TV for home viewing or to your handheld for the road. All of which can be translated in profits for whoever controls the access points of the data sync."





